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Gold rallied from support over the last two weeks and reached a weekly pivot candle low at 1201. Price moved slightly above this resistance before failing and reacting lower. This resistance level also roughly coincided with 38.2% Fibonacci level adding to the significance of this area. Market is ranging and a failure to penetrate the aforementioned resistance suggests that the price Gold will move lower before another attempt higher can be occur. This would lead to a creation of lower high which would have bearish indication and mean that the technical picture deteriorates. Currently we have a higher weekly high from May and a lower weekly low from the beginning of June. This picture gives mixed signals and forces us to focus on a longer term bearish indication from a down sloping 50 week SMA (coincided with May high). Also the downward sloping price channel that has been in force since the 2013 high was put in place at 1434 gives a similar indication. Since November price has been moving sideways near a support but the lack of momentum is indicating lack of serious long interest in this market. Price needs to make higher lows and break resistance levels in order to turn the picture more bullish.

Nearest support and resistance levels: 1162 and 1201.

Gold, Daily

Gold broke out of descending regression channel two weeks ago and after some hesitation in form of a sideways move moved to a resistance at 1201. Stochastics oscillator had also moved to overbought levels suggesting that price has moved too far and should have a correction. This resistance and upper Bollinger Bands were too much for buyers and after a sideways day on Friday, the price of Gold has moved lower today. The line of least resistance is on the downside today and price could move as low as 1172 support before significant buyers step in.

The nearest significant support levels are at 1172,1201 and 1214.60.

Gold, 240 min

The price of Gold has at the time of writing retraced back to 23.6% Fibonacci level. Stochastics oscillator is close to the oversold threshold but this indication should be taken with a pinch of salt as price is trading close to a higher time frame resistance level. In other words it is more likely that price will move lower before solid support is found. The first potential support levels are close to lower 4h Bollinger Bands near 1180. These levels also coincide with 61.8% Fibonacci retracement level at 1178.8 and a rising trendline drawn from the June 5th low. Nearest significant support and resistance levels: 1178 an 1205.

Conclusion

Longer term picture is mixed with Gold moving sideways and making both higher weekly highs and lower weekly lows. Since November price has been moving sideways near a support but the lack of momentum is indicating lack of long interest in this market. Price needs to make higher lows and break resistance levels in order to turn the picture more bullish. In the short term the price of Gold is trading lower from a resistance level with the first significant support levels at around 1180. I am looking for lower time frame sell signals with targets at 1184 (T1) and 1178 (T2).

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

EURUSD didn’t move much yesterday even though some positive news was received from the negotiations on financing Greece. The pair rallied to 1.1410 but failed creating both a 4h and eventually a daily rejection candles. This was very much in line with what I have been saying over the last week about EURUSD being limited on the upside to 1.1435 and with downside potential to 1.1000. The bearish wedge supported the view and now price action has confirmed this analysis with a breakout from the wedge. Today’s price action is likely downward biased with upside limited to 1.1319 while I see support between 1.1112 and 1.1148. The nearest significant daily support and resistance levels are at 1.1050 and 1.1434.

ECB has increased Emergency Lending Assistance to Greece this morning while the country has been now given 48 hours to reach a debt deal. EU leaders see progress in the Greek talks after the latest reform list showed a narrowing of the gap between creditors and the Tsipras administration and have given Greece 48 hours to finalise a deal. Eurozone Finance Ministers will meet again on Wednesday and could sign off a package if there is a staff level agreement by then. EU heads of state will then meet again on

Thursday with the aim to finalise a deal by the end of the week. It is likely that this will include an extension of the current bailout agreement and financing of upcoming ECB and IMF repayments through existing ESM funds earmarked initially for Greek bank recapitalisation. Greek debt is likely to be lengthened or re-profiled, although given the current construction of the ESM holding most of Greece’s debt, an outright write off seems less likely.

The 5.1% May US existing home sales bounce to a 5.35 mln pace yesterday beat the prior 5.31 mln four-year high to leave the strongest pace since the spike to a 5.44 mln clip back in November of 2009 with the homebuyers’ tax credit. We also saw a 4.6% median price rise to $228,700 new cycle-high, as prices now sit near the all-time high of $229,500 in June of 2005. Sales have bounced sharply in the seasonally important spring season after a dismal Q1 performance, alongside big rebounds for pending sales, permits, and the MBA purchase index, though we still have an anemic pace of housing sector recovery overall, with lean inventories and a cyclical price uptrend.

Currency Pairs, Grouped Performance (% Change)

AUD and USD strength together with EUR weakness have been the main themes this morning. EURAUD has lost the most ground at the time of writing as the pair failed to penetrate a resistance yesterday and is now approaching the lower end of the sideways range. Another strong mover this morning is NZD against EUR. EURNZD is struggling to penetrate a weekly pivotal resistance level at 1.6445. EURGBP is also down this morning despite the fact that the pair is close to support levels and lower daily Bollinger Bands.

Nearest important daily support and resistance levels for these pairs are:

EURAUD 1.4427 / 1.4769
EURNZD 1.6159 / 1.6674
EURGBP 0.7110 / 0.7211

Main Macro Events Today

China’s June HSBC/Markit PMI rose to 49.6 from previous 49.1 even though it was expected to remain in contraction for the fourth straight month.

EMU PMI: Eurozone preliminary June PMI readings are expected to show a stabilisation in the manufacturing number at 53.6 (median same) and a decline in the services reading to 53.6 (med same) from 53.8 in the previous month, which should bring the composite down to 52.0 (med same) from 52.2. PMIs still point to ongoing expansion and national indicators are looking more even but there is no further acceleration in output growth and the data tie in with the ECB’s view that growth is broadening but not necessarily strengthening. This will leave the central bank firmly on course for full implementation of QE measures despite the pickup in headline inflation. Indeed, there still is some outside chance of a widening of asset purchases if the Greek crisis implodes and threatens to derail the recovery and stability in the rest of the Eurozone.

US New Home Sales. May new home sales should reveal a 1.0% decline to a 512k (median 520k) unit pace for the month following the 6.8% bounce to a 517k pace in April. Despite today’s firm existing home sales figures which had the headline pace up 5.1% there is still downside risk to tomorrow’s release from the NAHB decline to 54 in May and the fall in housing starts to 1,036k from 1,165k in April.

U.S. Durable Goods. May durable goods data should reveal a 0.5% (median -0.5%) decline for orders following a 1.0% drop in April. Shipments are seen rising by 0.5% with inventories up by 0.2% following respective April figures of -0.2% and 0.2%. Data in line with this forecast would leave the I/S ratio steady at 1.67 for a third month. There is downside risk to the report from the decline in Boeing orders to 11 from 37 in April and the weak industrial production figures which fell by 0.2% in May.

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Technical picture in EURUSD is bearish with price moving outside the bearish wedge I’ve had on the chart for quite some time now. Resistance area below 1.1239 is likely to turn price lower today and with no high quality support levels in proximity of current price action I am expecting to see another strong sell off today. My target for today’s move is 1.0937 as this level is likely to turn price higher again. Important daily support and resistance levels are at 1.1207 and 1.0930.

An agreement at technical level with Greece needs to be on the table today, in time for Finance Ministers to sign off the agreement at the Euro group meeting Wednesday evening ahead of Thursday’s EU summit. Even if this goes without a hitch, Tsipras will still have to get the deal through parliament in Athens and then through the German parliament. So plenty yet that could go wrong and trigger another flip in fixed income markets.

Yesterday US new home sales rose 2.2% to a 546k pace in May after rebounding 8.1% to 534k in April (revised from 517k) from the 9.4% March drop to 494k. That knocked the month’s supply to 4.5 from 4.6 (revised from 4.8). Regionally, sales were split with gains in the Northeast and West, and declines in the Midwest and South. The median sales price fell 2.9% to $282,800 from $291,100 (revised from $297,300). Prices are down 1.0% y/y versus the 6.0% y/y clip in April. Data are better than expected. The U.S. Markit flash PMI manufacturing index slipped to 53.4 in June from May’s 54.0 and is down from April’s 54.1. It’s a third straight monthly decline and is the weakest reading since October 2013. However, employment and new orders were higher, with the former at its fastest pace since November. Average cost burdens were up for a second straight month.

Currency Pairs, Grouped Performance

USD strength yesterday turned into weakness this morning with EURUSD and NZDUSD leading the pack. EUR pairs are seeing some strength across the board even though the German IFO was a disappointment today. AUD performance has been mixed while JPY is the loser this morning as it is down against almost all the competitors.

EURJPY came close to a support level at 138 and has now bounced higher but struggles with a resistance at 138.90. GBPJPY is one of the performers this morning as it’s trying to break above a sideways range it has been bound for a week. As this has been caused by the pair trading at resistance this is not an ideal spot to be a buyer in this pair. CHFJPY moving higher from the bottom end of an ascending triangle formation.

Significant daily support and resistance levels for aforementioned pairs are:

EURJPY 138.00 / 140.63
GBPJPY 194.63 / 195.35
CHFJPY 131.50 / 134.35

Main Macro Events Today

China’s June HSBC/Markit PMI rose to 49.6 from previous 49.1 even though it was expected to remain in contraction for the fourth straight month.

German IFO came in much weaker than expected, with the overall confidence reading falling to 107.4 from 108.5 against consensus expectations for a drop to 108.1. The weaker than expected number is in stark contrast to yesterday’s better than expected PMI readings, which showed improved sentiment in both services and manufacturing sectors. The IFO reading showed the third consecutive drop in the forward looking expectations number, which was likely impacted by uncertainty about Greece and is now at the lowest level since the start of the year.

Euro group meeting An agreement between Greece and its creditors needs to be reached in time for Finance Ministers to sign off at the Euro group meeting this evening, ahead of tomorrow’s EU summit.

US Gross Domestic Product The Q1 GDP growth is likely to be revised to -0.4% from -0.7% in the second release, following 2.2% growth in Q4. Forecast risk: downward, given last year’s big downside surprise for the second revision that may be on track for a repeat. Market risk for USD: downward, as a weaker report could impact the already-fragile Fed rate hike timing.

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Yesterday’s EURUSD trading was limited by the resistance level just below 1.1239. Market turned lower below this level as I expected and has since failed to push through this resistance but the selloff I anticipated didn’t materialize. Market has now formed a flag in 4h timeframe and projection from this formation suggests potential all the way down to 1.0915. The 50% Fibonacci level (measured from March low to May high) can be found at 1.0965 while my target of 1.0937 sits in between the aforementioned levels. The pair has been range bound with some effort to push the price higher but now it has moved below the 4h flag formation. I don’t expect yesterday’s high of 1.1234 to be exceeded today but look for a movement below latest pivot low at 1.1134 and towards my target. Important daily support and resistance levels are at 1.1207 and 1.0930.

Pensions remained sticking point in Greek talks, according to the FT citing leaked documents covering creditors’ counter offers to Greece’s reform plans. Creditor demands are focusing on the time line for a raise in the retirement age as well as the time contributions have to be made to benefit from full pensions. The pension system has been a key issue of controversy right from the start with creditors demanding a comprehensive overhaul of a system where costs spiraled out of control over the last decades.

There already was one reform in 2012 but costs remain too high with creditors demanding further cuts, while at the same time recommending a basic social safety net, which so far doesn’t exist in Greece, leaving the pension of parents and grandparents a fall back for many unemployed.

TsIpras’s meeting with creditor officials run into the early hours of Thursday morning, but in the end there was still no deal on the table. Eurozone Finance Ministers, which had gathered Wednesday evening, had little to discuss, and called off their meeting early, while agreeing to meet again this afternoon. Negotiators have already re-started talks this morning and the discussions with Tsipras will continue at 9 am local time. European heads of state are gathering for a 2-day summit again today and it seems Tsipras is banking once again on discussions at leaders level, where he can play Greece’s card of strategic Nato partner in the south-east of Europe and threats to forge closer ties with Russia.

This ties in with Greece’s demands that the ESM take over Greece’s debt at the IMF and the ECB. Merkel, however, has repeatedly stressed that a deal with the institutions, including the IMF, is a prerequisite. A Greek government minister put the chances of a deal at just 50% now and Grexit is becoming a real possibility. Sticking points are reportedly mainly immediate emergency measures demanded by creditors, which want to see the government passing more reforms through parliament before handing over further cash.

Even if there is an agreement and that is a very big if now, Tsipras will still have to get the deal through parliament in Athens and may run into difficulties with the left wing of his coalition. If he loses the votes of some of his allies there may be a greater shift in government or a referendum after all. The German parliament, which also has to sign off the deal, said it won’t vote on any agreement before it has been rubber stamped by Greek lawmakers. And another extension of the bailout agreement, which seems likely, will mean more talks and public wrangling.

The U.S. Q1 GDP growth boost to -0.2% from -0.7% slightly beat estimates thanks to small upside surprises spread across consumption and intellectual property, though we generally saw the mostly expected modest hikes for private and public construction, and boosts of $4.5 bln for inventories and $0.4 bln for net exports that left a small hike in real final sales growth to a still-weak -0.6% from -1.1%.

Currency Pairs, Grouped Performance

AUD strength really sticks out today. Australian Dollar is nicely up against everything else while EUR is weak and JPY is showing some strength. AUDUSD is moving higher from a rising channel support at 0.7700 while AUDCAD is approaching a resistance at 0.9594. GBPAUD is rolling over from a sideways formation after hitting a resistance at 2.0556. EURAUD has moved lower today after hitting a resistance at 1.4549 yesterday.

Significant daily support and resistance levels for these pairs are:

Main Macro Events Today

German Jul GfK consumer confidence falls to 10.1 from 10.2 in June. The dip was a tad below market consensus. Greek concerns are likely to have weighed, although German sentiment reading remain at very high levels, amid a robust labour market and rising disposable income, which is not only boosted by low inflation, but also sizeable wage gains this year. The breakdown for the Gfk, which is only available until June, showed a marked decline in the reading for business expectations, while income expectations surged. The willingness to buy fell back slightly, but remains high. The German consumer will continue to support the recovery.

EU Extraordinary Economic Summit

US Personal income is expected to grow 0.4% in May, while consumption should be up 0.9%. Forecast risk: upward, given the stronger May employment report. Market risk: downward, as softening in data could impact rate hike timelines.

US initial jobless claims are expected to be 270k (median 272k) in the week-ended June 20. Continuing claims are expected to rise to 2,225k for the week-ended June 13. Forecast risk: downward, as some risk remains from oil sector disruptions. Market risk: downward, as weaker than expected data could delay rate hike expectations.

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

EURUSD keeps on moving in a range while market participants wait for clues on what will happen with Greece. In previous reports I’ve pointed to a resistance below 1.1239 and suggested it would cap the upside yesterday and day before. This has been the case and price bars in both daily and 4h charts have been making lower highs. The bearish daily technical picture points to lower prices but the lack of downside momentum over the last two days and this morning forces me to question this indication.

Also, this being Friday and with no progress in Greece – EU negotiations in sight market might be range bound for yet another day. EURUSD has had a few narrow two to three day ranges since the March low but no such four day ranges. Therefore, we are approaching the breakout from this range. Range bound market means that the supply and demand are in a relative balance and therefore probabilities of price moving lower are now smaller. In other words, the likelihood of price moving up as easily as it could go down has increased. At the time of writing market has been rallying higher and towards the resistance levels. Intraday price action at resistance will give us clues on how likely it is that the resistance will hold. Important daily support and resistance levels beyond the range are at 1.0930 and 1.1292.

Currency Pairs, Grouped Performance

This morning it has been the commodity currencies that have taken beating. At the time of writing AUD and NZD are down against the majors. JPY has been attracting money from AUD and NZD while USD, EUR and GBP have not had constant performance one way or the other. NZDJPY has been moving lower for the last two weeks and is now trading relatively close to a weekly support level at 84.08 and right at a support zone created by a weekly pivot candle. AUDCHF rally failed from a resistance yesterday and has been now moving lower closer to a 4h pivotal support at 0.7182. The 0.7750 resistance proved too much for AUDUSD again yesterday and the pair fell down to lower 4h Bollinger Bands and close to a support provided by rising daily trendline. However, price has made lower highs in 4h resolution which suggests that this market is lacking in buy conviction.

Significant daily support and resistance levels for these pairs are:

Main Macro Events Today

China’s June HSBC/Markit PMI rose to 49.6 from previous 49.1 even though it was expected to remain in contraction for the fourth straight month.

German May import price inflation was weaker than expected, falling back to -0.8% y/y from -0.6% y/y in April. Prices were down 0.2% m/m and for once not because of lower energy prices, but a sharp decline in prices for consumer goods. Prices for durable goods dropped 0.9% m/m and prices for non-durable goods fell 0.5% m/m. The monthly drop, which was likely impacted by the rebound in the EUR from the middle of April to the middle of May, brought the annual rate for imported consumer goods to a still relatively high 3.3% y/y.

BoE Governor Mark Carney Speech

EU Extraordinary Economic Summit The Q1 GDP growth is likely to be revised to -0.4% from -0.7% in the second release, following 2.2% growth in Q4. Forecast risk: downward, given last year’s big downside surprise for the second revision that may be on track for a repeat. Market risk for USD: downward, as a weaker report could impact the already-fragile Fed rate hike timing.

US Michigan Consumer Sentiment: The second release on June Michigan Sentiment is out Friday and should be revised up to 95.0 (median 94.6) from 94.6 in the first release and 90.7 in May. The report has displayed a consistent, though, diminishing tendency toward upward revisions over the past year.

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

The euro is under pressure in early-week trade as Greece’s talks with the Eurogroup broke down over the weekend, and the ECB refused to top up ELA assistance. Greece has consequently imposed capital controls and announced a referendum for next Sunday, which will determine whether the electorate has the stomach to exit the euro. Finally, after five years, the Greek drama is coming to a definitive head. Polls suggest that the people of Greece would rather compromise to stay in the euro than exit, but markets will remain on tenterhooks this week ahead of the referendum. Some key US data are also due this week, culminating with the release of the June payrolls report on Thursday (Friday is a holiday in the States). EURUSD hit a four-week low at 1.0953 after closing Friday at 1.1166, subsequently recovering above 1.1000. Recoveries will likely remain muted affairs, though incoming polls out of Greece will have potential to create volatility this week.

EURUSD is trading higher and tries to close the gap. Not suprisingly EUR is down against all the currencies but at the time of writing there is no sense of panic spreading across the FX markets. This is evidenced at the time of writing by EURUSD trading higher after the gap opening. Asian, European and US equity futures markets are down and Gold is trading higher by 0.4%.

EURUSD remains bearish as it is difficult to anticipate what the political players will do and how it impact markets. Over the next few days we should see trading opportunities for technical traders that know how to take advantage of nervous markets and volatility. EURUSD has a resistance level not far above current price action at 1.1130 which in the light of what’s happening with Greece suggests that EURUSD will trade lower after the return move is over. The June 1st candle seems to be the first pivotal support area and I expect this support hold today unless new suprising news items come up.

Janne Muta
Chief Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

The Swiss National Bank has confirmed it engaged in a currency intervention yesterday in EURCHF as the bank sees CHF being too expensive versus EUR (EURCHF being too low). This supported both EURCHF and to certain degree other EUR pairs in yesterday’s trading. As a result EURUSD moved through the resistance level at 1.1130 and spike up to 1.1278 before falling down again. As per EURUSD futures today’s trading has been careful with light volumes after yesterday’s strong volatility. Strong movement higher from a support suggests that there is further upside ahead in EURUSD. I am seeing intraday support between 1.1110 and 1.1140 while significant daily support and resistance levels are at 1.1006 and 1.1292.

According to ECB’s Coeure Grexit can no longer be excluded. The executive board member said in France’s les Echos that a Greek exit from the Eurozone can unfortunately no longer be excluded, even if the ECB and Eurozone institutions want Greece to stay. Coeure said the European proposals gave Greece time and autonomy to take reform steps, adding that it was Greece’s decision to end the negotiations. Coerue also said that a “No” in the referendum would make it very difficult to continue the political dialogue.

Many commentators are now asking what Greece will be voting on this Sunday. For EU Commission President, the July 5 referendum will be a vote on Greece’s future in Europe, for the Greek opposition it is a vote on EMU membership, but for Tsipras and Syriza it is a way to change bailout terms. The Greek government is still selling a “No” to the creditor’s bailout offer as a chance to get improved conditions, but in reality, the offer will likely no longer be on the table on July 5 and without a bailout program in place the ECB will have difficulties defending its ongoing ELA assistance, which effectively turns it into a lender of last resort and the financier of the Greek government, something the Eurozone treaties clearly rule out. For now Draghi just decided to freeze the amount of ELA, but with the bailout program running out tomorrow, the ECB’s review of the situation on Wednesday could not only end re-financing for Greek banks, but also the Greek government, at least within the Eurozone system.

Yesterday US Dallas Fed manufacturing index improved to -7.0 in June after falling to -20.8 in May. This is a 6th consecutive month that the regional index has been in contractionary territory (below zero), which is mainly a function of the recession in the oil sector. US pending home sales rose 0.9% to 112.6 in May, it’s a 5th straight monthly gain, from a revised 2.7% increase April to 111.6 (was 112.4). Regionally, sales were up in the Northeast (6.3%) and West (2.2%), but lower in the Midwest (-0.6%) and South (-0.8%). Compared to last year, sales are up 8.3% y/y from 12.6% y/y.

Currency Pairs, Grouped Performance

All currencies have been losing ground against the JPY today as EUR has been falling against everything else but weak NZD. This speaks of need to find a safe haven. With GBP and AUD having mixed performances EUR uncertainty and a need safe haven definitely are the main themes for today. The way to participate in this action is to trade EURJPY which is down by over 1.20% at the time of writing.

The biggest movers at the time of writing are NZDUSD, EURJPY, GBPNZD, AUDNZD, NZDJPY.

Significant daily support and resistance levels for these pairs are:

Main Macro Events Today

German May retail sales rose 0.5% m/m, against expectations for a correction from the strong April number, which showed sales up 1.3% m/m. Still, the three months trend rate continues to decelerate from the peak of 2.4% back in February and the annual rate fell into negative territory.

Switzerland’s KOF leading indicator much weaker than expected at 89.7 in the headline reading for June. This is well down on the Bloomberg median forecast of 93.7 and also down from the 93.1 reading of May. The unexpected reversal will be a concern for Swiss policymakers given the sharp appreciation of the franc earlier in the year. The SNB confirmed that it intervened in the currency market yesterday, buying EURCHF.

German June jobless numbers dropped 1K, less than expected, as unemployment ticked slightly higher in West Germany. The seasonally adjusted jobless rate remained unchanged at a very low 6.4%, but the data highlights that the slowing down in economic momentum, that showed up in the surveys in recent months, is starting to have an impact on the labour market.

Eurozone CPI TheCore CPI was confirmed as forecast at 0.8% in June. A 0.2% rise from 0.6% in May while the headline number came in at 0.2% after being flat in May.

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

EURUSD found support at the lower end of my support range (1.1110 – 1.1140) yesterday and was moving sideways inside this range overnight. At the time of writing price is again at intraday support at 1.1100 after reacting higher from it earlier today. I have been expecting today’s trading being limited between 1.1100 support and resistance at 1.1201 as market participants wait to see how the Greek drama develops but there seems to be no momentum from this support. Therefore the emphasis will be on watching the price action at current levels in order to see if buyers are stepping in or out of the way. Weekly picture suggests that EURUSD could be range bound between 1.0955 and 1.1466 for several weeks unless something extraordinary and unexpected happens. Significant daily support and resistance levels are at 1.1006 and 1.1292.

Greece defaulted on its IMF repayment yesterday and today Tsipras is prepared to to accept bailout conditions. Greece’s latest letter to creditors says Greece is “prepared to accept this Staff Level Agreement subject to the following amendments, additions or clarifications as part of the extension of the expiring EFSF program and the new ESM Loan Agreement”. The FT reports that the two page letter was sent as a clarification to yesterday’s surprise ESM loan request. The Eurogroup will discuss it in a teleconference at 15.30GMT today. The mentioned amendments are reportedly are only a handful of minor changes. If confirmed, this will clearly help the ECB to extent ELA assistance for now and the referendum may be called off.

German Finance Minister Schaeuble is still taking tough line on Greece, saying the letter from Tsipras that accepted most of the bailout conditions lacks clarity and that Greece’s proposals still aren’t a basis for serious measures. The euro has given back most of the gains it saw following the earlier news of the Tsipras letter.

An IMF default would not have necessarily meant a cut off in ELA, which so far has only been frozen at last week’s level, as according to earlier Reuters reports citing an ECB official Greek banks could still have ruled to be solvent for up to 5 days after the non-payment to the IMF. However, without a bailout program in place and no clear hope of another one, Draghi would likely have faced growing resistance in the council with Weidmann already questioning previously if ongoing emergency assistance doesn’t violate the prohibition of direct government financing through the ECB. This will still be the case, but if both sides are at least negotiating again, Draghi will unlikely want to be the one to pull the plug, at least for now.

Yesterday US consumer confidence surged to 101.4 in June from 94.6 in May (revised down from 95.4). It ties the March reading, and is the second highest print this year, bested only by the 103.8 in January. The latter was the highest since June 2007. The present situations component rose to 111.6 from 107.1 (revised from 108.1). The expectations index was 94.6 from 86.2 previously (revised from 86.9). The labor market differential improved to -4.3 versus -6.6. The 12-month inflation gauge edged uo to 5.1% from 5.0% (revised from 5.1%).

Fed’s Fischer said the FOMC will consider hiking rates in coming months, but did’t elaborate on the timing. The Fed VC, speaking on Monetary Policy in the US and in Developing Countries from Oxford University, added the the economy likely warrants only gradual moves and that the Fed is mindful of the risks of premature tightening. Growth should accelerate to about a 2.5% pace in Q2, and the pickup in the economy should further tighten the labor market. The dollar has been a significant headwind to growth. The Fed will monitor spillover effects in emerging markets.

Currency Pairs, Grouped Performance

At the time of writing there has been no strong movement in most of the pairs. CHF has lost some ground and NZD moved against other currencies after being weak yesterday. NZDJPY has moved against the prevailing trend and is now close to levels (83.50) it could sell off again (currently trading at 83.28). EURNZD is trading at intraday support but is close to a weekly resistance level at 1.6445. GBPNZD has also retraced to a support level at 2.3050 and is trading higher now. GBPCHF is trading close to 1.4795 resistance while AUDCHF is trading also near resistance and upper daily Bollinger Bands.

Significant support and resistance levels for NZD pairs are:

Main Macro Events Today

China’s manufacturing PMI numbers came in short of expectations. The HSBC/Markit PMI slipped to a final 49.4 in June from the preliminary or flash 49.6 reading, but did manage to top the 49.2 seen in May. The official manufacturing PMI fell to 50.1 in June from 50.9 in May. The contractionary reading for the HSBC/Markit PMI and the erosion in the official PMI highlight the ongoing difficulties in China’s economy. The Shanghai composite is hovering around unchanged.

UK Markit manufacturing PMI is expected to improve to 52.5 (median same) and the Swiss PMI to pick up to 49.9 from 49.7, although after Tuesday’s KOF miss there has to be a risk to the downside and it seems the strong currency is having more of a negative impact than feared.

US Manufacturing ISM. The June ISM is out on Wednesday and should show an increase to 53.0 (median 53.1) from 52.8 in May. Other measures for the month have generally improved and we expect the ISM-adjusted average of all measures to climb to 53 for the month after holding at 51 in both May and April. It appears that producers have adjusted to the hit from falling oil prices over the winter and are once again feeling more confident.

U.S. Construction Spending. May construction data is out Wednesday and is expected to remain unchanged (median 0.3%) following a 2.2% bounce in April and a 0.5% clip in March. There is some downside risk that mixed housing data for May could weigh on the report.

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

EURUSD didn’t attract enough buyers yesterday but traded lower on slightly better than expected US macro releases. The pair moved all the way down to support at 1.1032 and is after failed push higher the pair is moving sideways. The pair is still trending lower in a downward regression channel and a breakout accompanied with a higher low is needed to change the picture more positive. The next intraday resistance at 1.1095 is fairly close and coincides with the Bollinger Bands while 50 period SMA is currently at 1.1132. Move closer to May 27th pivotal low looks likely if EURUSD stays in the channel today but the proximity of Monday’s low should slow the tempo. Important daily support and resistance levels are at 1.0937 and 1.1135.

Eurozone markets are bouncing back and Bund and Gilt futures are under pressure as safe haven flows receded on hopes of a Greek deal, but the risk of another set back remains high. The Greek referendum is still on and with Tsipras still calling for a “No” to the last creditor offer, Eurozone officials decided to hold off any future talks until the referendum is through. It looks like the yes camp is shrinking amid the banking closure, but Tsipras continues to sell the vote as a chance to get a better deal, while Eurozone officials see it as a vote on Eurozone membership. The latter would get a resounding “Yes”, but that is not how the referendum will be worded. For now the ECB is keeping the Greek banks and implicitly the government afloat with ongoing ELA assistance, but the question is how long Draghi will be able to maintain the Greek banks are essentially solid.

Yesterday’s US reports revealed upside surprises across the ISM, ADP, and construction spending figures, though vehicle sales are posting a 3% June drop-back from a May cycle-high that trimmed the day’s good news. For construction, we had revisions back through 2013 that lifted the construction trajectory into Q2 after what is now a smaller winter-weather hit, hence lifting growth prospects despite restraint in new home construction. The ISM popped to 53.5 from 52.8 with a employment spike to 55.5 from 51.7, while ADP posted a solid 237k June rise that defied the typical downward bias in as-reported ADP figures.

Currency Pairs, Grouped Performance

Yesterday, I pointed out that NZDJPY was at levels it could sell off again. At the time of writing NZDJPY is trading 0.61% below yesterday’s close. NZD is also down against EUR as EURNZD has been rising (up 0.95%) from the support identified in yesterday’s report. GBPNZD has been another nice runner since the publication of my report yesterday, up by 0.80% from yesterday’s close.

This morning AUD weakness against everything else but NZD sticks out while USD and EUR are seeing some strength against the majors. GBP and JPY have mixed performance.

Significant daily support and resistance levels for AUD pairs are:

Main Macro Events Today

US Initial Jobless Claims: Claims data for the week of June 27th is out Thursday and we expect to see the headline remain about steady at 270k (median 272k) from 271k in the week prior. Claims have generally improved in June and look poised to leave a 272k average for the month following a 274k average in May.

US Factory Goods Preview: May factory goods orders are out on Thursday and should reveal a 0.5% (median -0.5%) decline for orders with shipments up 0.4% and inventories down 0.1% for the month. This follows respective April figures of -0.7% for orders, flat for shipments and 0.1% for inventories. Data in line with our forecast should leave the I/S ratio steady at 1.34 for a third month.

US Non-Farm Payrolls: June employment data is out on Thursday and should reveal a 230k (median 230k) headline employment increase following a 280k bounce in May. We expect the unemployment rate to tick down to 5.4% (median 5.4%) from 5.5% in May.

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

After a smaller than previous gap opening EURUSD rallied to a resistance at Friday’s close and turned lower as the buyers failed to challenge the sellers at the resistance. Trading Greek related politics is difficult, if not impossible and that leaves us with technicals. Technically EURUSD is inside a potential support area but still relatively close to a weekly low from two weeks ago (1.1130) and is now trading outside the upward trend channel. This and the lower high in mid-June suggest that the pair might come lower this week. Current trading takes place just above a support (1.0948) but there isn’t much upside momentum and the nearest resistance at 1.1032 isrelatively close. This should dampen the bulls’ readiness to bid the prices higher. This could lead to sideways trading today. Daily support and resistance levels: 1.0930 and 1.1135.

European markets in general are holding their breath ahead of today’s Eurogroup and EU leaders meetings. Bund and Gilt yields continue to decline as stocks remain under pressure, although losses on FTSE and DAX remain limited so far and peripheral Eurozone 10-year yields outside of Greece came off yesterday’s highs. Officials stress that they want to keep Greece in the Eurozone, but also that that still requires firm reform commitments from Greece. So all eyes are once again on Tsipras and his new Finance Minister.

The latter may represent more of a change in style than substance, however, and it remains unclear what proposals both will bring to Brussels. What is clear is that with the ECB tightening the pressure by raising the haircut on Greek collateral substantially today’s round of meetings really represent Greece’s last chance to prevent default and Grexit.

Greece’s last chance to come to an agreementand avoid bankruptcy is a quick deal or at least the firm progress of one at today’s Eurogroup meeting that will be followed by an EU summit in the evening. Hollande and Merkel stressed again yesterday that time is running out and the ECB tightened the pressure on banks by raising the haircut on Greek collateral – reportedly to 45%. Banks will remain closed today and tomorrow, but without a deal it will be almost impossible to open them again quickly and the government will likely face troubles at tomorrow’s T-bill auction. Grexit will almost become inevitable. If there is a deal, ECB’s Nowotny suggested that the ECB could provide bridge financing. So once again all hinges on Greece’s proposals and its willingness to compromise.

ECB also lifted haircut on Greek collateral, while maintaining ELA assistance to Greek banks for now. The decision will increase pressure on Greece ahead of today’s Eurogroup meeting and EU summit. It will also put local banks in a difficult position ahead of Wednesday’s T-Bill sale. The Greek government has been relying on rolling over T-bills to keep afloat, with Greek banks and institutions the only takers. With the fresh increase on the haircut, it will be increasingly costly for Greek banks to hold Greek government debt.

US June ISM services index edged up to 56.0 from May’s 55.7 as per yesterday’s release. However the 57.8 in April is still the highest of the year, while the 58.8 in November was cycle high since November 2005. However, components were mixed. The employment index fell to 52.7 from 55.3. New orders rose to 58.3 from 57.9, while new export orders declined to 52.0 from 55.0. Prices paid slid to 53.0 from 55.9. Also, US Markit services PMI fell to 54.8 in the final June print versus May’s 56.2 (and 54.8 June preliminary). It’s the lowest since January’s 54.2 and reflects continued slowing in the expansion. A year ago the reading was 61.0. Employment slid to 54.1 versus 55.5 in May, though the expansion in the job sector has persisted for 64 straight months. The composite index dropped to 54.6 from 56.0 in May (and 54.6 for the June preliminary). It is also the lowest since January.

Currency Pairs, Grouped Performance

We’ve seen USD and JPY strength today together with some movement in favour of CHF which suggests that there is a tendency to look for a safe haven. This is understandable with Greek drama continuing and global stock markets being weak, especially the Chinese stocks. EUR has been slightly weak almost across the board but has taken a hammering against the USD and JPY. With GBP and AUD the the storyline is very similar.

Main Macro Events Today

German industrial production unchanged over the month in May, with April revised down to 0.6% m/m from 0.9% m/m reported initially. The annual rate jumped to 2.1% y/y from 1.1% y/y in the previous month. Yesterday’s orders number also showed a sharp uptick over the year, but confidence indicators already suggest that the momentum is running out of steam. At the same time the tight German labour market has led to a wave of industrial actions and sizeable wage gains. This year consumption may be able to sustain ongoing growth, but the likely loss of competitiveness could well lead to German underperformance in coming years.

UK industrial production unexpectedly rose by 0.4% m/m (median -0.2%) in May after 0.3% growth in April (revised from 0.4%). The y/y figure registered 2.1% growth (median 1.6%), up from 1.2% in the previous month. A solid 7.3% rise in oil and gas production was behind the strength. The narrower manufacturing outlook data, which is more reflective of economic trends, disappointed, unexpectedly falling 0.6% m/m (Bloomberg median +0.1%), worsening from April’s -0.6% m/m figure. The y/y figure was +1.0% y/y (Bloomberg median 1.8%) after 0.1% in April (revised down from 0.2%). Sterling initially spiked on the strong industrial headline, but has since dropped to net lower levels against both the dollar and euro as markets disgust the weak manufacturing output data.

US Trade Balance: The May trade deficit is expected to narrow 5.8% to -$38.5 bln after narrowing 19.2% to -$40.9 bln in April. Exports in May are expected to grow 1.0% while imports show a -0.2% decrease on the month. Forecast risk: upward, as depressed oil prices could impact imports. Market risk: downward, as weaker than expected data would push back rate hike assumptions.

US Consumer Credit: The May consumer credit report is out on today and should reveal a $18 bln (median $18.5 bln) increase for the month following a $20.5 bln increase in April and a $21.3 bln gain in March. Over the past year the headline has averaged $18.2 bln, about in line with our forecast.

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.